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Canada's national weekly current affairs magazineSun, 02 Aug 2015 20:26:29 +0000en-UShourly1http://wordpress.org/?v=4.2.2If you want to reform EI to boost hiring, go back to the 1990shttp://www.macleans.ca/economy/economicanalysis/if-you-want-to-reform-ei-to-boost-hiring-go-back-to-the-1990s/
http://www.macleans.ca/economy/economicanalysis/if-you-want-to-reform-ei-to-boost-hiring-go-back-to-the-1990s/#commentsTue, 23 Sep 2014 14:47:25 +0000http://www.macleans.ca/?p=613203The Liberals propose dusting off an old EI-reform program that would avoid the flaws in the government's Small Business Jobs Credit

]]>In response to a government employment-insurance (EI) reform proposal that only applies to very small companies and has a major structural flaw, Liberal Party Leader Justin Trudeau has proposed an alternative. Instead of reinventing the wheel, the Liberals are suggesting a policy be brought back from the 1990s, one that avoided the unintended consequences of the current government proposal, where firms receive benefits by firing workers.

The policy the Liberals wish to resurrect was called the New Hires Program (NHP). It was announced in November 1996 and lasted for two years. The program guide listed the relatively straightforward criteria for eligibility:

Your share of 1996 EI premiums, including the premiums for all employers with whom you were associated on Dec. 31, 1996, was less than $60,000.

Your share of 1997 EI premiums, including the premiums for all employers with whom you were associated in 1997, was at least $250 more than the amount of 1996 EI premiums for you and all associated employers.

Eligible firms that saw their EI payments rise in 1997 (either through hiring or increasing the wages of their workers) had any increase in EI payments returned back to them (minus $250) as a rebate, up to $10,000. This program was better designed than the current government program in three distinct ways:

1. Far more firms were eligible, as the $60,000 eligibility cap greatly exceeded the $15,000 cap of the government’s recent proposal, even after accounting for inflation.

2. Firms only received benefits if they increased their payrolls. Under the current proposal, companies can hold steady or reduce their payrolls and still receive a rebate.

3. Under the New Hires Program, companies cannot make themselves ineligible for the rebate by hiring too much, since the eligibility criteria were backward-looking. Under the current government proposal, eligible firms can make themselves ineligible by hiring too much, causing them to lose their tax credit. As well, ineligible firms can make themselves eligible for the program by firing workers and cutting salaries, giving them a $2,200 tax credit they would not have otherwise received.

The Liberals have not released details of their plan, so we do not know how closely it would resemble the New Hires Program. As such, we cannot fully evaluate claims to the cost of the program or the effect it will have on employment. According to the 1997 budget, the cost in Year 1 of the New Hires Program was $250 million, so Liberal claims that they could build a second-generation NHP for $225 million seem reasonable. As far as the effects on employment, I do not believe any economist has published a study on the effect the NHP had on job growth. If they had, the number would likely have been far more modest than what politicians would claim, as a significant portion of the increase in payrolls would have happened even without the tax rebate. Economists and politicians will always be at loggerheads when it comes to job growth claims, with economists continually stating that the benefits are overstated and politicians will respond like William Shatner at a Star Trek convention.

The New Hires Program provides a great framework for a new Small Business Job Credit. I hope the government will take Trudeau’s suggestion seriously and correct the flaws in their current proposal.

]]>http://www.macleans.ca/economy/economicanalysis/if-you-want-to-reform-ei-to-boost-hiring-go-back-to-the-1990s/feed/0The dangerous, misguided flaw in the small business tax credithttp://www.macleans.ca/economy/economicanalysis/the-dangerous-misguided-flaw-in-the-small-business-tax-credit/
http://www.macleans.ca/economy/economicanalysis/the-dangerous-misguided-flaw-in-the-small-business-tax-credit/#commentsMon, 15 Sep 2014 11:40:24 +0000http://www.macleans.ca/?p=608255The Harper government's new boutique tax credit makes it better for some companies to fire workers or cut their pay than to hire new ones

Given the weak state of the labour market in many parts of Canada, government has a role to create a more attractive environment for business to hire new workers. As such, I was enthused to hear that the government was planning on reducing Employment Insurance costs for firms. However, the proposed “Small Business Job Credit” has major structural flaws that, in many cases, give firms an incentive to fire workers and cut salaries. Like my colleague Stephen Gordon, I am no fan of this proposal.

The proposal itself is relatively straightforward, but has some rather peculiar properties:

The Small Business Job Credit will effectively lower small businesses’ Employment Insurance (EI) premiums from the current legislated rate of $1.88 to $1.60 per $100 of insurable earnings in 2015 and 2016. Any firm that pays employer EI premiums equal to or less than $15,000 in those years will be eligible for the credit.

Although this is sold as a job credit, there is no requirement that companies hire new workers. A firm can have fewer workers and a lower payroll than they had the year before and still receive a tax credit.

A larger problem with this proposal is the discontinuity that occurs when a firm reaches $15,000 in EI payments to the government. Once a firm crosses that threshold, it goes from collecting a tax credit of $2234.04 to collecting nothing.

This “EI cliff” kicks in fairly early, as a small business with as few as 12 employees can have EI contribution costs above $15,000 per year. Those firms then face a decision: Are they close enough to the edge of the cliff that they should cut staff or wages in order to obtain the tax credit? (Full disclosure: I own such a company that is on the “wrong” side of the cliff). The way this proposed system is designed is that the maximum benefit a company can receive from firing a worker and going under the $15,000 threshold far exceeds the maximum benefit a small business can receive from hiring an additional worker:

The maximum benefit a firm can receive from firing a worker is $2234.04.

The maximum benefit a firm can receive from hiring a worker is $190.52.

These calculations assume 2014′s EI maximum insurable earnings of $48,600. The maximum benefit of firing a worker is over 11 times the maximum benefit of hiring a worker. Of course, a firm can also alter their payroll costs by increasing or decreasing the salaries of their workers. This new system creates perverse incentives for firms to cut employee salaries:

The maximum benefit a firm can receive from a $100 payroll reduction is $2234.04.

The maximum benefit a firm can receive from a $100 payroll increase is $0.39.

The choice to look at payroll increments of $100 is somewhat arbitrary, as I could have chosen to look at units of $1 or $10,000. Regardless of the increment used, it is clear that firms under the $15,000 EI threshold have a big incentive to keep wage increases to a minimum so they do not lose their tax credits. Conversely, firms that are just over the $15,000 EI threshold have an incentive to cut the pay of their staff in order to gain the tax credit.

I cannot imagine that the purpose of this policy is to drive down wages and drive up unemployment. A better-designed system would avoid these pitfalls. The obvious solution would be to simply cut EI premiums across the board. However, if the government wants to issue these funds in the form of a tax credit, there are better ways of doing so. One way would be to have a reduced rate for the first, say, $100,000 in total insurable earnings above their 2014 total insurable earnings. This would reduce the cost for the firms in hiring new workers and offering wage increases and not provide tax credits for firms that are cutting staff. The $100,000 threshold is there to ensure costs do not get out of control, but firms that increase their payrolls by more than $100,000 would still receive the maximum benefit and not have their benefits clawed back, as in the current proposal.

Overall, I believe the government’s heart is in the right place in wanting to reduce EI costs for firms. The challenge now is to get the details right, before this incredibly flawed plan becomes reality.

]]>http://www.macleans.ca/economy/economicanalysis/the-dangerous-misguided-flaw-in-the-small-business-tax-credit/feed/2Why the new EI tax credit could do more harm than goodhttp://www.macleans.ca/economy/economicanalysis/why-the-new-ei-tax-credit-could-do-more-harm-than-good/
http://www.macleans.ca/economy/economicanalysis/why-the-new-ei-tax-credit-could-do-more-harm-than-good/#commentsThu, 11 Sep 2014 20:57:41 +0000http://www.macleans.ca/?p=606419Reducing payroll taxes, like EI premiums, is good policy. Too bad that's not what the Harper government chose to do.

There was a lot of talk about job creation leading up to the federal government’s announcement of a reduction in employer contributions to Employment Insurance (EI), and there’s plenty of reason to believe that lower EI premiums have the potential to increase employment and wages. But the Conservatives have yet again eschewed a straightforward and effective measure and adopted one that is complicated and most likely to have little effect on employment or wages.

Reducing EI contributions is not in itself a bad idea. The EI balance is usually in surplus to cover the costs of running the program, but the surplus is currently running about $2 billion above what it was before the crisis. Perhaps not coincidentally, the PBO’s estimate for the “break-even” EI balance is about $2 billion lower than what it is now.

EI premiums are generally structured to make sure that the program breaks even, so the government had two choices: make EI more generous or reduce premiums. To the surprise of absolutely no one, the CPC has chosen the latter option. But once again, instead of simply reducing EI contribution rates, the Conservatives have created yet another boutique tax credit. To understand the implications of this move, it’s worth taking some time looking at what we might have seen if the government had simply reduced the premiums paid by employers.

In a standard analysis of payroll taxes (EI and CPP contributions are effectively payroll taxes) it turns out that even though the taxes are paid by the employers, the actual tax burden is mainly borne by the workers: wages are driven down by the reduction in labour demand. This is the distinction between the statutory incidence of a tax (who sends the money to the government) and its economic incidence (who is ultimately out of pocket). (See here for a primer on the economics of tax incidence and see here for an application to payroll taxes.)

If the government had simply reduced EI premiums paid by firms, workers would have been—after a certain transition period—the main beneficiaries. But instead of doing this, the government has set up a tax credit that can only be claimed by small businesses whose EI contributions are less than $15,000 a year (see this explainer for how it works). As Kevin Milligan noted on Twitter, this sets up yet another “kink” in the tax schedule: small businesses will lose this tax credit if they grow too large.

Special treatment for small businesses is another one of those things that makes lots of sense to politicians and much less so to economists. Here’s how Duanjie Chen and Jack Mintz put it in a 2011 paper for the School of Public Policy:

In contradiction to the widely held view that small business tax concessions encourage growth, such small business tax relief could actually be antithetical to growth by creating a “taxation wall.” First, it could result in the breakup of companies into smaller, less efficient-sized units in order to take advantage of tax benefits even if there are economic gains to growing in size. Second, it could encourage individuals to create small corporations in order to reduce their personal tax liabilities rather than grow companies. And third, it could lead to a “threshold effect” that holds back small business from growing beyond the official definition of “smallness,” regardless of the criteria for measuring size (e.g., the size of revenue or assets, or the number of employees).

There are clear spikes in the number of firms just under the income threshold that makes them eligible for the Small Business Deduction. For many of them, the tax system is a clear disincentive for growth.

The tax credit announced today will have a similar effect. For firms that are just under the $15,000 threshold, hiring a new worker would mean crossing the line and losing the tax credit entirely. For firms that are just over the threshold, the incentives are even more perverse: firms may choose to actually reduce employment in order to be eligible for the tax credit. To be sure, not all small businesses are in this position and many will be able to hire and take advantage of the tax credit. But it’s by no means clear at this point that the positive incentives to hire more workers will outweigh the negative ones.

Nor is it clear that the usual incidence result—i.e, that workers benefit most from payroll tax cuts—will apply with this new tax credit. Competitive pressures are a crucial feature of the standard framework: wages get bid up because all employers are paying lower taxes. In this case, the only upward wage pressure there might be would come from small businesses who are well below the $15,000 EI contribution threshold.

Reducing payroll taxes is usually a clear win-win situation, resulting in increased employment and higher wages. The Conservatives have passed up this opportunity by creating yet another targeted boutique tax credit.

]]>OTTAWA — The plight of jobless Canadians denied employment insurance benefits hasn’t improved under the federal government’s new social-security tribunal during the first year of its existence, documents show.

The general division of the tribunal made decisions on 1,075 employment insurance appeals from April 1, 2013 — its first day of operation — until mid-March of this year.

Of those appeals, 866 of the original rulings to deny employment insurance benefits to claimants were upheld, including 71 “late appeals refused,” according to documents obtained under freedom-to-information legislation and provided to The Canadian Press.

Only 209 decisions were overturned, amounting to an appeal dismissal rate of just over 80 per cent. That’s marginally higher than the rate in previous years under the old regime, according to government data.

Neil Cohen of the Community Unemployed Help Centre in Winnipeg says he expects the dismissal rate could grow even higher under the new tribunal.

“This is a system that wasn’t designed to work — it works very well for the government, but not for average Canadians,” he said. “It has deterrents built right into it, components that discourage claimants from participating.”

For example, Cohen said, three people — an employee representative, an employer representative and a chairperson — have been replaced in the new system by one Conservative government appointee.

As well, the majority of hearings on EI appeals are now held via teleconference or video conference, not in person.

“When the person’s there, sitting in front of you, it’s a lot easier to assess credibility. It’s like a job interview — most people would far prefer to do the interview in person rather than having someone decide their fate over a computer screen or a telephone,” Cohen said.

The tribunal was created with the goal of providing a more efficient appeal process for EI, Canada Pension Plan and old-age security decisions. The Conservatives said the new system, which replaced several boards comprised of hundreds of part-time employees, would save taxpayers $25 million annually.

The 80 per cent dismissal rate came in the months following the Conservative government’s contentious overhaul of the Employment Insurance system last year.

Starting in January 2013, people collecting employment insurance faced stricter, more complex rules for keeping their benefits, with the goal of getting unemployed workers back into the workforce sooner.

The new regulations encouraged unemployed workers to take available jobs fairly close to home, even if they paid less than their previous work.

As always, EI claimants were required to be engaged in a “reasonable job search” to find suitable employment. But under the new rules, the search has to involve researching job opportunities, preparing a resume, registering for job banks, attending job fairs, applying for jobs and undergoing competency evaluations.

Unions and opposition MPs have accused the Conservatives of unduly punishing seasonal workers and Maritimers.

The social security tribunal has been straining under a growing backlog of 10,000 outstanding appeals. The tribunal was seriously under-staffed its first year, with several full-time positions remaining vacant until last month.

There are fewer than 70 full-time appointees on the tribunal — several of whom donated money to the Conservative party, public records show.

]]>OTTAWA – The Supreme Court of Canada has sided with the federal government in a long-running legal fight with Quebec’s leading labour organizations in a multibillion-dollar employment insurance case.

The unions sued the Harper government after it decided in 2010 to close the old employment insurance account and transfer the $57 billion balance into the government’s general revenues.

The Confederation des Syndicats Nationaux said the move was unconstitutional.

The court, however, agreed with the federal argument that it had the authority to do this because the matter was dealt with in a 2008 Supreme Court decision.

A lower court sided with the federal government, but the Quebec Court of Appeal overturned that and the government appealed to the Supreme Court.

The justices say the original judge in the case was right to dismiss the union suit because it was bound to fail.

]]>ST. JOHN’S, N.L. – A disproportionate drop in employment insurance recipients in Atlantic Canada suggests federal EI restrictions are having a negative impact that will only get worse as seasonal industries lay off staff, critics say.

“Those changes target seasonal workers,” said Erin Weir, an economist with the United Steelworkers Canadian national office. “We’ve already seen in the data that the number of employment insurance recipients has been cut more sharply in the Atlantic provinces than nationally.

“We’re not seeing a decline in unemployment, but we are seeing a decline in employment insurance,” he said from Regina. “And that would seem to reflect federal policies that are kicking people off benefits.”

Weir said the number of jobless workers has been stuck at around 1.4 million for at least the past year.

Yet, Statistics Canada reports that the number of those receiving EI benefits in July was down almost six per cent across Canada from the year before. That compares to a drop of 11 per cent over the same time period for Newfoundland and Labrador, 16 per cent in P.E.I., 12 per cent in Nova Scotia and nine per cent in New Brunswick.

In Ontario, Quebec and Alberta, the decline in EI benefits for each province was about three per cent.

B.C. had a drop of 11.5 per cent, Manitoba 12 per cent and Saskatchewan seven per cent.

The federal Conservative government says EI changes it implemented in January are a “modest and reasonable” effort to ensure the system is fair and flexible.

Those adjustments do not change eligibility requirements such as the number of insured hours to qualify, says an emailed response from Employment and Social Development Canada. Rather, they clarify long-standing job search requirements for all recipients — including repeat claimants, it says.

“Claimants are only expected to look for work within their communities, no greater than one hour’s commute away. Moreover, personal circumstances are taken into account, such as the availability of public transportation and access to child care.”

Weir says the statistics speak for themselves.

“I do think we’re seeing the consequences of federal cutbacks to EI,” he said.

Lana Payne, Atlantic director of the new Canadian amalgamated union Unifor, said the big question is the extent to which Ottawa will enforce its clarified job search rules this winter.

She says she believes there is an ulterior motive for the push to get seasonal workers off benefits and into often poorly paid, service-sector vacancies.

“These kinds of changes were really about trying to cater to low-wage dependent employers,” she said. “They kind of missed the whole point that perhaps what we need to be doing to attract people to jobs in other communities means that we have to increase the wages to get them there.”

The program is still “an incredibly unfair, unjust, exploitative system” that subsidizes seasonal employers, he said in an interview.

“And it’s not the people in Atlantic Canada who are being exploited by it. It’s the people in seasonal industries in Atlantic Canada who are exploiting other people who never draw on the system and who expect to work all year to keep themselves and their families in the conditions that they think are appropriate for them.”

Crowley concedes that some industries such as tourism, fishing and agriculture are cyclical. But before EI, workers switched jobs with the seasons, he said.

The option to collect EI benefits rather than work creates a terrible incentive, he added.

“We’ve said to them: ‘Okay, work for a short period of time in one industry and you’re off the hook for the rest of the year.’ And that in itself has created a vast amount of unemployment in Atlantic Canada.”

Crowley said the federal government should charge higher EI premiums to employers who repeatedly lay off staff.

“We have a system in which the seasonality of the economy is not caused by the nature of the industry, but is driven by the incentives within the employment insurance system.”

]]>Today. Finance Minister Jim Flaherty says employment insurance premiums will be frozen for the next three years.

Three months ago. Mr. Speaker, we have crowd-sourced over 3,000 questions from Canadians across the country for the Prime Minister on economic challenges facing the middle class. I want to ask the Prime Minister a question I received from Dustin in Calgary. His question is specifically about his EI premiums, which are rising by $50 this year, a direct payroll tax increase. Dustin would like to know why the Prime Minister chose to raise EI premiums for him and every other working Canadian?

]]>In the first hour of debate this weekend, New Democrats passed six resolutions under the heading “Innovating and Prospering in the New Energy Economy.”

1-01-13 Resolution on Combatting Tax Shelters Submitted by Hochelaga

WHEREAS, in addition to creating a “parasitic” sector driven by tax evasion, tax shelters serve to hide profits and the very existence of vast fortunes, often obtained by criminal means;

BE IT RESOLVED that a new clause be added to Subsection 1.7 of the Policy Book:

e. Combatting tax shelters and money laundering.

Resolution 1-02-13 Resolution on Attackes on the Trade Union MovementSubmitted by Hamilton Mountain

WHEREAS the Harper government has imposed back to work legislation on numerous unions representing Postal Workers, Air Canada Workers, and Canadian Pacific Workers;

WHEREAS the Harper government’s 2012 federal budget will directly cut 19 000 federal public service jobs over the next three years and;

THEREFORE BE IT RESOLVED that the Federal New Democratic Party reaffirm its commitment to free open scope collective bargaining and will continue to oppose any federal government administrative or legislative measures to impose collective agreements on federal public sector workers and workers in the private sector

BE IT FURTHER RESOLVED that the Federal New Democratic Party continue to support the Rand formula and will oppose any initiative or legislation that will undermine the Rand Formula and union security.

BE IT FURTHER RESOLVED that a New Democratic Government will revoke Bill C-377 an Act to amend the Income Tax Act (Labour Organizations)

1-53-13 Resolution on Employment InsuranceSubmitted by Acadie-Bathurst WHEREAS seasonal industries comprise a dynamic, essential part of Canada’s identity and economy;

WHEREAS Canadian workers and their employers make EI contributions and are the owners of the program;

BE IT RESOLVED that the NDP move to restore the integrity of Canada’s EI program by amending the Employment Insurance Act to include the following measures:

BE IT FURTHER RESOLVED that the Conservative government must hire adequate staff to administer Service Canada programs efficiently and substantially reduce wait times.

BE IT FURTHER RESOLVED that the government should change the Working While on Claim regulation so that EI claimants are not dissuaded from working during their benefit period.

BE IT FURTHER RESOLVED that the NDP lobby the government to overturn the devastating changes made to the EI program which limit access and lower benefits, resulting in lower wages and restricted access and increasingly pushing vulnerable Canadians into poverty and transferring the costs to the provinces.

BE IT FURTHER RESOLVED that the NDP lobby the government to reinstate the Extended Employment Insurance Benefits Pilot Project (5 additional weeks) to offset the “black hole” of financial insecurity faced by seasonal workers and the regional economies they support.

BE IT FURTHER RESOLVED that the NDP lobby the government to restore access to the board of referees and the umpire so that all Canadians have access to a fair and equitable appeal system, as was the case prior to the devastating changes made to the Employment Insurance program.

1-17-13 Resolution on Pay EquitySubmitted by London—Fanshawe, London West

BE IT RESOLVED THAT the following clause be added to section 1.6 in the policy book

BE IT RESOLVED THAT Section 1.9 (g) of the policy book be amended as follows:

New Democrats believe in:

g. maintaining supply managed dairy, eggs, and poultry, and the farm incomes they support. New Democrats will work to ensure that in any new trade agreement, our successful system of supply management is upheld.

“Mr. Speaker, Conservative Senator Mike Duffy has now admitted he mistakenly collected, maybe, about, $100,000 in Senate housing allowances. How does one accidentally claim $100,000 in living expenses? He says the form was too complicated,” the NDP leader reported sarcastically. “We also have Senator Pamela Wallin who has an Ontario health card while claiming to be a resident of Saskatchewan. She told the federal government that she lived in one province but told the provincial government that she lived in another. This would be unacceptable for any other Canadian. Why does the Prime Minister seem to think it is acceptable for his Conservative senators?”

The Prime Minister was away, so it was Peter Van Loan’s responsibility this day to offer the official reassurances. “Mr. Speaker, we have committed to ensure that all expenses are appropriate,” the Government House leader reported, “that the rules governing expenses are appropriate and to report back to the public on these matters.”

But Mr. Van Loan apparently sensed that Mr. Mulcair was not sufficiently serious in his concern for the Senate. “The reality is, if we want to see real change in the Senate, real change toward an accountable Senate,” Mr. Van Loan segued, “we need to embrace the Conservative proposal to actually let Canadians have a say on who represents them in the Senate. The NDP simply will not do that.”

So if you are truly upset with the actions of the senators Mr. Harper has appointed, you simply must agree to pass Mr. Harper’s legislation to reform the Senate. Neat trick, that. Indeed, if this has been the Prime Minister’s play all along, to appoint dozens of senators—and two former members of the press gallery at that—in the hopes that somehow someday they would do something to incite the sort of controversy that would leave everyone begging for change, he is precisely three times the brilliant strategist he is often thought to be.

Of course, if Mr. Van Loan really wanted to move ahead with Senate reform, he might invoke time allocation to bring the legislation to a vote. Unless the Conservatives now believe that such maneuvering, of which they have otherwise been so fond, is somehow undemocratic.

This much though was merely the preamble this day. Indeed, for perhaps the first time since Confederation, the Senate was only the setup and not the punchline.

Three weeks ago, Mr. Mulcair recalled, the Human Resources Minister had said there were no fraud-finding quotas for government employees charged with administering employment insurance. A new report suggested otherwise. The NDP leader wondered if the minister might ask for the forgiveness of the hard-working Canadians she was treating like criminals.

Instead, Diane Finley stood to explain that she’d been right all along.

“Service Canada indicates that it does not impose quotas that would result in negative consequences for employees who fail to achieve them,” she said. “Rather, there are performance targets that help protect benefits for unemployed people against fraud.”

“Ohh!” sighed various New Democrats in mock realization.

So it is not that government employees must reach a quota or be punished, it’s just that there is a target they are encouraged to reach.

Mr. Mulcair was unimpressed. He accused Ms. Finley of misleading the House and, for good measure, he wondered if she might call off the inspectors—”Reform Macoutes,” he called them, apparently in reference to this—she’s apparently dispatched to knock on doors and quiz EI recipients.

But now Ms. Finley was apparently quite worried about what might happen if Mr. Mulcair somehow mocked her into not acting. “Mr. Speaker, last year the employment insurance program lost hundreds of millions of dollars due to fraud and ineligible payments, and that despite nearly half a billion dollars of ineligible payments that were detected and stopped by Service Canada,” she explained. “The only people who lose if the opposition stops us from rooting out employment insurance fraud are Canadians who follow the rules.”

For the sake of avoiding unflattering references to the Conservative Senator for Prince Edward Island, Ms. Finley’s minders might want to advise her to remove the phrase “ineligible payments” from her explanation.

Mr. Mulcair attempted to finish with a flourish. “The minister is sending investigators into the homes of randomly selected seasonal workers in Atlantic Canada. They cannot send them to inspect senators of course because we do not know where they actually live,” Mr. Mulcair mocked.

The New Democrats laughed.

“We know what the Prime Minister thinks about workers in Atlantic Canada. He calls them losers, and says that they have a ‘culture of defeat,’ ” Mr. Mulcair continued, proving that no good gaffe ever really dies. “Does that explain the reaction and the attitude of the minister? Does she think that they are a bunch of losers as well?”

The New Democrats stood to applaud.

“Mr. Speaker, that is absolutely a load of nonsense,” Ms. Finley sighed. “We are supporting Canadians in their efforts to get back to work. That is why we have expanded the job alerts program and we have expanded the job banks, so Canadians get the information about the jobs that are available for them. EI is there as a temporary income support to help Canadians while they are transitioning to another job. However, if the jobs are not available, then EI will be there for Canadians as it always has been.”

Ms. Finley finished with a reassuring and entirely non-threatening smile.

Fear not then beleaguered senators. Should you find yourself declared ineligible for your assigned seat in the Senate, you will not simply be hustled out of the chamber and deposited on Wellington Street to fend for yourself. The government of Canada will be there for you. With regular emails about jobs in your field. Presuming, one supposes, some province or municipality decides to open its own upper house.

]]>http://www.macleans.ca/politics/ottawa/the-commons-senators-need-not-fear-unemployment/feed/16Finley says Conservatives have set dollar ‘targets’ for EI fraud but not quotashttp://www.macleans.ca/news/finley-says-conservatives-have-set-dollar-targets-for-ei-fraud-but-not-quotas/
http://www.macleans.ca/news/finley-says-conservatives-have-set-dollar-targets-for-ei-fraud-but-not-quotas/#commentsMon, 25 Feb 2013 19:56:47 +0000http://www2.macleans.ca/?p=354003OTTAWA – The federal government denies it has given civil servants quotas for catching employment insurance fraud — but now says there are performance objectives in place.
Human Resources Minister…

However government documents obtained by Montreal newspaper Le Devoir show civil servants are expected to find $485,000 each in fraudulent EI claims each year — a total that corresponds to the previously reported $40,000 monthly quota.

NDP Leader Tom Mulcair says the Conservatives are treating the unemployed like criminals and contrasts their pursuit of EI claimants with the expense scandal swirling around Conservative appointees in the Senate.

Finley told Mulcair that EI investigators do have performance objectives but she says there’s a big difference between targets and quotas.

The Conservative government, as you might know, has adopted new measures that make it more difficult for people to claim Employment Insurance (EI) benefits, including new guidelines about what constitutes a “valid” job search. The most controversial measure is one that denies benefits to EI recipients if they refuse what is deemed to be a “suitable” job offer.

I’m not going to delve into the merits and/or demerits of the current attempt to improve the system. What I will say here is that, one way or another, EI reform will always be on the agenda, because there really is no way to get it completely right. There’s a fundamental moral hazard problem that will never go away.

[A] situation where a party will have a tendency to take risks because the costs that could incur will not be felt by the party taking the risk. In other words, it is a tendency to be more willing to take a risk, knowing that the potential costs or burdens of taking such risk will be borne, in whole or in part, by others.

(If you want learn more about how moral hazard works, I highly recommend listening to the moral hazard episode of the CBC Radio series The Invisible Hand. Come to that, I highly recommend listening to all episodes of the show, if you haven’t already.)

Employment Insurance offers insurance against the risk of losing your job. But the fact that this safety net is out there makes it less costly to accept the sorts of jobs that have a higher risk of leaving you unemployed. This isn’t a bad thing in itself: for example, it’s important to maintain an environment where startup firms, where jobs are notoriously a gamble, can hire and grow.

EI, however it is designed, will always offer a particular set of incentives: “satisfy these criteria, and we will give you money.” And the overarching lesson of economics is that people respond to incentives. Documenting these responses is an ongoing research project in labour economics. Here are a couple of examples:

“Qualifying for Unemployment Insurance: An Empirical Analysis,” by UBC’s David Green and Craig Riddell. According to the (then) UI rules that were in place, you needed to have worked for 14 weeks to be eligible for benefits. But there was a provision that allowed this requirement to be reduced to 10 weeks subject to parliamentary approval. Parliament routinely gave this approval — except in 1990, for reasons unrelated to UI. The result: that year, there was a sharp decline in 10-week employment spells, and a sharp increase in 14-week employment spells. “Between 1989 and 1990, there is a substantial decline in the hazard in the 10-13 week range, with a particularly noticeable decline at 10 weeks. These changes are offset by an increase in the spike in the hazard at 14 weeks and by increases in the hazard between 14 and 20 weeks.”

“Find a Job Now, Start Working Later: Does Unemployment Insurance Subsidize Leisure?” by Princeton PhD candidate Marjolaine Gauthier-Loiselle. People who have found a job but haven’t started working yet are still classified as unemployed. Gauthier-Loiselle found that the average interval between finding a job and the first day of work is about two weeks for those who had exhausted their EI benefits or who weren’t eligible to receive them, and about four weeks for people on EI.

The current round of EI changes is minor, and will no doubt be followed by another round of reforms as people figure out how the new system works. There’s always going to be some gaming of any system that offers cash payments, and — short of shutting the program down entirely — there’s no way of completely solving the moral hazard problem.

]]>http://www.macleans.ca/economy/business/the-employment-insurance-whack-a-mole-game/feed/17The Commons: Diane Finley’s words are used against herhttp://www.macleans.ca/politics/ottawa/the-commons-diane-finleys-words-are-used-to-hurt/
http://www.macleans.ca/politics/ottawa/the-commons-diane-finleys-words-are-used-to-hurt/#commentsMon, 04 Feb 2013 22:41:29 +0000http://www2.macleans.ca/?p=346471Let us now debate who are the "bad guys" here

]]>David Christopherson, in furious form, stood to recount the events of Friday morning.

“Last week, the Minister of Human Resources and Skills Development, who once described EI as… ‘lucrative‘ defended her new quota system by describing the unemployed as… the bad guys.’ ”

At least in so far as Diane Finley had in fact spoken the phrase “bad guys,” Mr. Christopherson was correct. It is merely in the entire context of those words that the New Democrat led the House astray.

The official opposition had been pestering the minister on Friday morning about a report that quotas had established for inspectors charged with rooting out fraud of the employment insurance system. In the midst of this, Ms. Finley—on two occasions—suggested the New Democrats were on the wrong side of this matter. “Mr. Speaker, with respect to the employment insurance program,” she said, “it is very important to note that, once again, the NDP is supporting the bad guys.”

Perhaps this was a prepared line—an attempt to turn an attack around. Perhaps Ms. Finley came up with this in the moment in a fit of frustration. Either way, the New Democrats have apparently decided to see Ms. Finley’s oversimplification and raise her a distortion.

“Law-abiding out of work Canadians deserve better than to be treated like criminals,” Mr. Christopherson declared. “Why is the government cutting EI just when people need it to the most?”

Here John Baird was provided an opportunity to be reasonable. “Mr. Speaker, my friend from the NDP has it all wrong,” he scolded. “The minister made no such statements. He is flat-out wrong.”

A few moments later, Nycole Turmel stood to read the charges against Ms. Finley en francais. “Tell the truth!” protested a voice from the government side.

Perhaps for the sake of not being too blatant about all this, each of the men and women on the opposition resisted the urge to yell back, “you first!”

Context, of course, has become something of a secondary consideration in this realm. (Though, as a concept, it at least matters more than nuance.)

Somewhere on the campus of Harvard right now, Michael Ignatieff is, for instance, still picking bits and pieces of things he once said out of his rear end. By the time he was defeated, he likely wished he’d never written or spoken a word before being anointed Liberal leader.

What distinguishes the New Democrats from their Victorian predecessors as official opposition is a willingness to engage in this stuff—a certain shamelessness with which they approach this business. The Liberals, for instance, would never have even conceived of presenting the Harper government’s change to the health care funding formula as a $36 billion cut. Mind you, that at least has some basis in what the Finance Minister actually conveyed during the last election campaign. Ms. Finley, on the other hand, is innocent of this specific insinuation—the New Democrats attempting a particularly ungraceful leap of the imagination to pretend otherwise.

“Mr. Speaker, it is rather that member who should apologize to Canadians,” the Human Resources Minister scolded, “because I did not say that.”

(And now having felt the sting of this sort of nonsense, Ms. Finley will no doubt be issuing an apology to Mark Holland.)

The New Democrats were on somewhat surer ground when they stopped pretending that Ms. Finley had attempted to insult anyone but New Democrats. “Mr. Speaker, when Canadians questioned Conservative legislation on privacy concerns, we were accused of standing with child pornographers. Now the Conservatives are resorting to name-calling again, accusing anyone who opposes their EI cuts and quotas of defending fraudsters. Canadians who have lost their jobs, through no fault of their own, deserve better than a minister who calls EI too lucrative and who guts it at every turn,” Chris Charlton explained to the House this afternoon.

Her question then veered back to the day’s opening gambit. “When will the minister stop demonizing the EI recipients and admit that the vast majority are hard-working people who simply want to access the benefits that they themselves paid for?”

Ms. Finley offered her response. “Mr. Speaker, I am totally in support of making sure that EI is there for those who need it when they are eligible for it. That is the whole purpose of it,” she said. “But to do that, we have to maintain the integrity of the system. That means rooting out fraud. That means going after people who are cheating the system and claiming taxpayer dollars to which they are not entitled. We do wish that the NDP would support us in rooting out these people so that those who are entitled to EI, who are eligible, will have the funds there for them when they need it.”

And so we were back to the pre-Friday disagreement over how exactly to go about administering and officiating employment insurance.

Half a dozen questions later, the discussion turned to crime prevention. The New Democrats were generally displeased with the approach of the government side. Public Safety Minister Vic Toews rose to restate the traditional response.

“What the federal government does do is provide the laws that allow the officers to arrest dangerous individuals and put them into custody,” he explained. “Unfortunately, we have not received support from the NDP to do that. At every turn those members have opposed measures to keep violent and dangerous criminals off the street.”

And so, again, the New Democrats were apparently on the side of the bad guys.

]]>http://www.macleans.ca/politics/ottawa/the-commons-diane-finleys-words-are-used-to-hurt/feed/31The case of Marlene Giersdorfhttp://www.macleans.ca/politics/ottawa/the-case-of-marlene-giersdorf/
http://www.macleans.ca/politics/ottawa/the-case-of-marlene-giersdorf/#commentsMon, 21 Jan 2013 18:57:50 +0000http://www2.macleans.ca/?p=339951Diane Finley talks to the Post about the case of Marlene Giersdorf, the Prince Edward Island woman who has been cut off from EI benefits.Q And what’s your reaction …

]]>Diane Finley talks to the Post about the case of Marlene Giersdorf, the Prince Edward Island woman who has been cut off from EI benefits.

Q And what’s your reaction to what you’ve seen so far?

A Personal circumstances will always be taken into consideration in determining someone’s eligibility. For example, if they don’t have transportation to another community where a job is, that will be taken into consideration. Child care responsibilities and costs will be taken into consideration because we want to make sure that when people work, they’re better off than when they don’t. That being said, Service Canada officials can only take into consideration the information that they have. If the claimant doesn’t provide all of the relevant individual circumstances, then Service Canada can only go with the information they have.

Q In this particular situation, do you know if the individual did provide that information to Service Canada?

A Service Canada has made multiple attempts to talk with her, to review her file, to go over the options, to get all of the information. But it had no success in reaching her and I really encourage her to get in touch with them.

Ms. Giersdorf, meanwhile, says she’s tried to contact Service Canada and also that she’s been protesting just outside a Service Canada office. And then there is bit of back-and-forth.

Last week, Queen said there were half a dozen jobs in Montague the woman could have applied for; however, Geirsdorf said they were all beyond her qualifications. Officials also say there is more to the EI case than meets the eye, but can’t discuss it.

]]>http://www.macleans.ca/politics/ottawa/the-case-of-marlene-giersdorf/feed/6Marlene Giersdorf: The new face of EI reformhttp://www.macleans.ca/politics/ottawa/marlene-giersdorf-the-new-face-of-ei-reform/
http://www.macleans.ca/politics/ottawa/marlene-giersdorf-the-new-face-of-ei-reform/#commentsTue, 15 Jan 2013 16:33:04 +0000http://www2.macleans.ca/?p=337361A single mother in Montague, Prince Edward Island has apparently been denied EI benefits because she can’t get to Charlottetown and her story has apparently struck a chord in PEI.…

]]>A single mother in Montague, Prince Edward Island has apparently been denied EI benefits because she can’t get to Charlottetown and her story has apparently struck a chord in PEI. The National Post talks to her.

Q: Why don’t you apply in Charlottetown?A: I could probably make a living in Charlottetown, but due to the fact that I do only rely on family and close, close, close friends that I don’t have a lot of, I’d be ruined personally. And my child, I fought tooth and nail with my ex to have him go to Montague [Consolidated School]. If I relocated into Charlottetown, who’s going to drive all the way from Montague to drive me in the summertime, when my son’s not in school, to pick him up? You know, I have 50/50 custody. I would have no transportation whatsoever, I would have to rely on cabs.

Q: If you were to get a job in Charlottetown that paid well, would you be able to get a car?A: No. I wouldn’t be able to even make it to the job to make enough money to get a car. And if I was hired on in Charlottetown I’d have to refuse the job because I wouldn’t be able to guarantee that I could get to my shifts everyday.

]]>OTTAWA – Contentious changes to employment insurance are now in effect.

Beginning Sunday, people on EI face stricter, more complex rules for keeping their benefits, with the goal of getting unemployed workers back into the workforce sooner.

To help people get back to work, the government has also launched a new service to provide information on available jobs and labour market conditions to subscribers via e-mail.

“The new job alerts system is an important part of our government’s plan to better connect Canadians with available jobs in their area,” said Human Resources Minister Diane Finley in a statement Sunday.

The changes to the EI program were first spelled out in May and elaborate on what the government defines as searching for a suitable job.

A suitable search for a job must now include preparing resumes, registering for job banks, attending job fairs, applying for jobs and undergoing competency evaluations.

A suitable job is defined by factors including commuting time, whether the hours are compatible with the claimant’s life and wages.

It will also take into account personal circumstances, such as health, physical capability to perform work, family obligations and transportation options.

The new rules also break down job seekers into essentially two groups: people who’ve long paid into EI but rarely make a claim and those who are regular users of the system.

A suitable job search for the latter group must include jobs that are similar to what they used to do and if one of those isn’t available after a certain period of time, the job seeker has to take any position they are qualified for and accept as much as a 30 per cent pay cut.

The changes have been met with criticism from some politicians and union leaders.

The Atlantic premiers say the new rules could have a devastating effect on fishery, farming and tourism industries which are all seasonal jobs.

And they’re concerned that if people are encouraged to leave home to take other jobs, they won’t come back.

Last week, hundreds of people in Moncton, N.B, gathered to protest the cuts outside the offices of a local Tory MP.

Policing the new system to make sure claimants are following through is expected to cost the government about $7.2 million per year.

But savings to the EI program are expected to be worth $12.5 million in benefits this year and $33 million next year.

Documents posted with the new regulations in December said it’s expected that about 8,000 EI claimants will have their benefits temporarily discontinued until they can prove they are meeting the new rules.

Statistics Canada said Friday that 40,000 job were created in December — all of it in full-time work — driving the unemployment rate to its lowest in four years.

Ontario accounted for about three-quarters of the jobs added across Canada in December and almost all of the other provinces either saw gains or stayed even.

The NDP is hoping for all-party support for a private member’s bill that would double parental leave for the parents of multiples … “This is not something partisan,” said Sana Hassainia, the NDP MP for Vercheres-Les Patriotes who will introduce the bill. “It’s something all Canadian citizens with twins or triplets can benefit from.”

Her bill ultimately seeks to amend the Canada Labour Code so that employees can take up to 72 weeks of parental leave in the event of a multiple birth or multiple adoption. The weeks can be divided between the two parents, used in its entirety by one parent or taken consecutively by each parent. It also amends the Employment Insurance Act so that parents of multiples and parents who adopt multiple babies at the same time can receive up to 70 weeks of parental benefits. Parents of multiples are currently entitled to the same 35 weeks parents with a single baby receive.

Ms. Hassainia was involved in a small kerfuffle earlier this year when she brought her infant son into the House.

]]>http://www.macleans.ca/politics/ottawa/idea-alert-73/feed/7Put the CEFIB out of its miseryhttp://www.macleans.ca/politics/ottawa/put-the-cefib-out-of-its-misery/
http://www.macleans.ca/politics/ottawa/put-the-cefib-out-of-its-misery/#commentsFri, 26 Oct 2012 14:00:04 +0000http://www2.macleans.ca/?p=307646Scott Clark and Peter DeVries hope C-45 marks the end of the Canada Employment Insurance Financing Board.In the second Budget Omnibus Bill related to the 2012 Budget, the Government …

In the second Budget Omnibus Bill related to the 2012 Budget, the Government proposes to suspend the operations of the Canada Employment Insurance Financing Board (CEIFB) until such time the Employment Insurance (EI) Operating Account returns to balance. According to the 2012 Budget, this is not expected until 2016. Is this the end of the CEIFB? Lets hope so.

The CEIC was established in 2008 to “set EI premium rates for the upcoming year in a transparent fashion”. This has never happened. In every year since its creation, the Government has overridden the rate recommended by the CEIC through an Order-in-Council. In the March 2012 Budget, the Government proposed further changes to the EI rate-setting process. The employee EI rate is now to be limited to a 5 cent per year increase until the EI Operating Account is balanced. This precludes the CEIFB from setting rates for at least another four years.

The Honourable Diane Finley, Minister of Human Resources and Skills Development, today announced the Government’s intent to adjust the Employment Insurance (EI) Working While on Claim pilot project.

“Concerns have been raised regarding the new EI Working While on Claim pilot project,” said Minister Finley. “We have listened to those concerns and today I am announcing our intent to make adjustments to the new pilot program.”

The current pilot project allows claimants to keep 50 cents for every dollar they earn from working while on claim. It removes the previous pilot project’s cap on earnings, which clawed back 100% of earnings over $75 or 40% which discouraged Canadians from accepting more available work.

Under the adjustment announced today, those EI recipients who were working while on claim between August 7, 2011 and August 4, 2012 will be given the option of reverting to the rules that existed under the previous pilot program. This change will go into effect January 6, 2013, but it will be applied retrospectively to August 5, 2012 – the start of the new pilot program.

For those who choose this option, their EI benefits will not be reduced on earnings made while on claim for the first $75 or 40 percent of their benefits, whichever is greater – the same as the previous pilot program. However, all earnings above that threshold will reduce their EI benefits dollar for dollar.

Beginning January 6, 2013, eligible claimants must make the request to revert to the old pilot parameters within 30 days of their last EI benefit payment. For claims that have already ended, claimants will have 30 days from the introduction of this option.

Eligible claimants will be required to make this request for any subsequent claims for the duration of the new pilot project, which runs from August 5, 2012, until August 1, 2015. For an eligible claimant who does not choose to be considered under the previous pilot rules, all current and future claims will be processed under the new Working While on Claim pilot rules.

For an eligible claimant, if they make the decision to opt for the previous pilot, they will not be able to revert to the new pilot during the same EI claim. In addition, if, in a subsequent claim, they receive Working While on Claim benefits under the new pilot introduced on August 5, 2012 they will not be allowed to opt for the old pilot should they file another claim the following year.

]]>http://www.macleans.ca/politics/ottawa/just-a-little-policy-change-to-announce-at-426pm-on-the-friday-before-a-long-weekend/feed/5What’s really going on with EIhttp://www.macleans.ca/politics/ottawa/whats-really-going-on-with-ei/
http://www.macleans.ca/politics/ottawa/whats-really-going-on-with-ei/#commentsTue, 02 Oct 2012 17:41:32 +0000http://www2.macleans.ca/?p=298946Paul McLeod explains what the changes to employment insurance really mean.The fact is this: the Working While on Claim program has been cut. Less money will be given to …

The fact is this: the Working While on Claim program has been cut. Less money will be given to people working part time while drawing EI under the new system than the one that existed until this summer … Some people who work frequently — earning 80 to 90 per cent of their weekly EI claims — will be better off under the new system. But those who make less will take home less money than they would have under the previous system. The department says it doesn’t have the numbers required to calculate exactly how many people will make less, but the drop in funding gives some indication.

]]>While the opposition continues to press Diane Finley about a problem with the Harper government’s changes to employment insurance, Ms. Finley’s office seems to be struggling to explain itself.

Opposition parties are accusing the government of clawing back more money from the poorest of Canadians with its recent chang­es to EI. But Diane Finley, human re­sources and skills development minister, countered that saying the “vast majority” of EI claimants are better off under her department’s new clawback system.

The Chronicle Herald attemp­ted to verify her claim, asking the department last Thursday for the average dollar amount earned by part-time workers receiving EI, as well as the dollar value of the average clawback under the previous system. The department responded Monday, saying it does not have the data to answer either ques­tion. The lack of data raises ques­tions about how Finley could say the “vast majority” of EI claimants will make more money under the new system.

]]>http://www.macleans.ca/politics/ottawa/the-ei-algebra/feed/5The Commons: Of algebra, the premiers and a new mom named Jenniferhttp://www.macleans.ca/politics/ottawa/the-commons-of-algebra-the-premiers-and-a-new-mom-named-jennifer/
http://www.macleans.ca/politics/ottawa/the-commons-of-algebra-the-premiers-and-a-new-mom-named-jennifer/#commentsThu, 20 Sep 2012 21:53:21 +0000http://www2.macleans.ca/?p=295831The PM, it seems, has a conversation with a premier every 9.7 days on average

]]>The Scene. It was of something Peter Van Loan said in his third response yesterday that Thomas Mulcair asked his first question today.

“Does the Prime Minister agree,” the NDP leader asked, “that employment insurance is, to quote his House leader, ‘an incentive for people to be unemployed?’ ”

Mr. Harper stood and clarified the necessity of employment insurance and asserted his interest in seeing people find jobs. Then he attempted to deal with the details.

“In the past, the way employment insurance worked was that individuals who went back to work lost dollar for dollar everything that they gained when they returned to work,” he said. “For the vast majority of people that is what happened. We are trying to make sure that Canadians can go back to work and continue to benefit.”

Mr. Mulcair proceeded to venture that Mr. Harper was not much interested in helping the unemployed. And, further, that Mr. Harper’s lack of interest extended to various people and concepts. “Mr. Speaker, the Prime Minister is not interested in meeting with the premiers. He is not interested in working together. He is not interested in the unemployed,” the NDP leader alleged. “He will travel around the world to Davos, to South America, to China but he will not even sit down with Canadian premiers. In seven years he has only met with the premiers once, the worst record of any prime minister.”

There was grumbling from the government side.

“Why will the Prime Minister not even listen to the people on the ground?” Mr. Mulcair asked. “Why will the Prime Minister not work together with his own fellow Canadians here at home?”

Mr. Harper has actually met with the premiers en masse twice—in November 2008 and January 2009. But the Prime Minister had an even more impressive-sounding number to table here.

“On the contrary, Mr. Speaker,” he responded. “I have met in person or spoken by telephone with Canadian premiers 250 times since 2006.”

This didn’t quite explain why Mr. Harper does not wish to meet with the premiers this fall, but the Conservatives stood to applaud their man’s communications skills all the same.

The math here is tricky—a summit with all the premiers apparently only counts as one meeting in the Prime Minister’s tally—but roughly speaking it would seem the Prime Minister has a conversation with a premier every 9.7 days. This is more often than you probably speak to some of your friends, but less often than you should be calling your mother (and if one imagines a premier exists somewhere between a friend and a familial relation for a prime minister, that seems about right). But there are 13 premiers and territorial leaders. If Mr. Harper were going nearly ten days between calling one, it might take him four months to speak with each of them. So how to know what to make of this number? (Perhaps the real measure should be how often Mr. Harper has called Robert Ghiz as compared to how often previous prime ministers checked in on Prince Edward Island. Perhaps something of a Mendoza Line for cooperative federalism could be established.)

“Mr. Speaker, does the Minister of Human Resources and Skills Development just not know that prior to August 5, EI claimants could earn 40% of their weekly benefits without any penalty?” Wayne Easter wondered from the far end of the room in his sing-songy whine. “Take Jennifer, a registered nurse in my riding on parental leave. Jennifer worked part-time to fill nursing-care shortages and keep up her skills. However, the government now has clawed back 50¢ on every dollar earned, making her worse off with the changes. Will the Prime Minister explain to this new mom on parental leave why he is taking half her wages for covering nursing shortages?”

“Mr. Speaker, what the honourable member conveniently ignores is the rest of this story,” the Human Resources Minister reprimanded. “That is that if Jennifer had worked more than 40%, every single dollar that she earned would have been clawed back on her EI. That is a disincentive to work. Our country cannot afford that. We have a shortage of skills and labour right across this country in a wide range of sectors and industries and professions. As a government, we want to ensure that Canadians are always better off when they are working. We are working toward that goal and we will continue to work toward that goal.”

“She doesn’t get it!” called a voice from the Liberal corner.

Now it was Rodger Cuzner’s turn to test the minister’s problem-solving skills. “The basic math shows that anybody who makes $260 a week or under is penalized under these rule changes. Stats Canada figures show us that part-time workers’ median income is $230 a week. So that would tell me that EI recipients who are working part-time are being penalized,” Mr. Cuzner concluded. “When will the minister admit that there is a problem and come and fix this problem?”

Ms. Finley opted here for optimism. “Mr. Speaker, the vast majority of people who are working on a claim will indeed be better off,” she offered. “That was our goal: to ensure that we have all the talented work that we can get. And we are working to connect Canadians with jobs. That is something the Liberals did not do.”

There were more grumbles from the Liberal corner. “It’s not working!” called a voice.

“We want to help,” Ms. Finley explained. “We will continue to improve the program so that our goals are achieved.”

Perhaps we might straighten all of this out with conference call between the premiers, the Prime Minister and Jennifer.

]]>The Scene. The Prime Minister wasn’t present for Question Period this afternoon. He had a photo op to attend to. As a result, it was Peter Van Loan’s responsibility to stand and lead the Conservative response this day. History will make notice of this only because it was under Mr. Van Loan’s leadership today that the Harper government fully embraced a satirical approach to political discourse.

After two Conservative MPs had been sent up to mouth this month’s talking point—Rick Dykstra deserves special mention for managing to accuse the NDP leader of both not backing down on cap-and-trade and not sufficiently defending it in the House—Thomas Mulcair stood and ventured his own version of events.

“Mr. Speaker, yesterday I asked the Prime Minister what his government is doing to help the unemployed. The Prime Minister’s answer was bring in more temporary foreign workers,” Mr. Mulcair reported.

“Can the Prime Minister tell us,” the NDP leader asked this afternoon, “exactly how bringing in more temporary foreign workers will help unemployed Canadians find jobs?”

In response, Mr. Van Loan deferred to an impressive-sounding number (“770,000 net new jobs”) and scary-sounding monsters (” job-killing carbon taxes”). Mr. Mulcair had some numbers of his own. “Mr. Speaker, there are still over 300,000 more people unemployed today than before the 2008 recession. That is the fact,” Mr. Mulcair asserted. “Wrong! Wrong!” cried various Conservative voices.

“The question is,” Mr. Mulcair clarified, “how will bringing in more temporary foreign workers help the unemployed in Canada? We wanted to help Canadian unemployed. The government is obviously helping unemployed in another country. The Conservatives have changed the rules to make it legal to pay temporary foreign workers up to 15% less than Canadian workers doing the same job. Is that their message to the unemployed? ‘Work for less or we will bring in someone to replace you.’ ”

There was some desk thumping on the opposition side and a dozen New Democrats stood to applaud their man’s outrage.

“Mr. Speaker, on the contrary, our policies aim to create more jobs for Canadians,” Mr. Van Loan asserted, left hand in pants pocket, right hand gesturing variously. “That is why we have brought in changes to our immigration policy that will actually put a preference on giving jobs to Canadians to see that Canadians get those jobs first. We want to see that happen.”

To square this rhetorical circle, the NDP leader moved on to the Harper government’s employment insurance reforms (“From now on, Canadians will have to choose: take a 30% permanent pay cut or be kicked off EI”). The Conservative House leader pronounced more shame on the New Democrats (“We believe that Canadians prefer to have a job and do not prefer to be on employment insurance”). And then Mr. Van Loan attempted to read from the NDP’s 2011 platform.

“The problem,” Mr. Van Loan posited of Mr. Mulcair, “is he will not address what he will do to kill jobs in Canada. He pretends it is not there, but it is here in black and white.”

Mr. Van Loan held in his hand a piece of paper. “It is called the New Democratic Platform 2011 and it says a ‘Total Expenditure.’ Sorry,” he stumbled, ” ‘Green Job Creation.’ Sorry. ‘Cap and Trade Revenues By Year,’ $21.5 billion—”

He was out of time and the New Democrats were standing to applaud and laughing happily at Mr. Van Loan’s bumbling.

“Mr. Speaker,” chided Mr. Mulcair, “I thank the other side very much for reminding Canadians about our plan to create green jobs.”

Mr. Van Loan gave it another try. “It is in black and white. He denies it and pretends it does not exist, but the problem for him is that it is here,” the Government House leader protested. “He ran on it in the last election and he pretends it is not there now.”

To think that a politician would run for office while promising a specific policy—put it in black and white in a campaign platform—and then pretend that policy was no longer there? (Imagine if that politician got elected? And then imagine if that politician went and attacked another politician for promoting the same policy that politician had once promised?) One can only assume Mr. Van Loan was being ironic in alleging such a ridiculous farce.

Now Mr. Mulcair was up, louder and more demonstrative and seeming to suggest that the next to be unemployed were sitting across from him.

Mr. Van Loan now turned to new evidence: the NDP’s motion calling on the Prime Minister to accept an invitation to meet with the premiers to discuss the economy. “We finally got details of the NDP plan for the economy above and beyond the carbon tax,” the Government House leader reported. “Tomorrow, in its opposition day motion it has set out its detailed economic plan. He has been asking for point-by-point details. What is the NDP plan? Let us have a meeting in a couple of months. That is his idea: more meetings. That is not going to solve the economy.”

This was indeed hilarious. Primarily because of the six-point plan the Prime Minister announced the day after the election in October 2008. Point #2 was a meeting with the European Union. Point #3 was to have Parliament meet to review a fiscal update. Point #4 involved participating in a meeting of G20 finance ministers and calling for a meeting of G7 finance ministers. And then there was Point #6: “Convening a First Ministers’ Meeting on the Economy to discuss with premiers and territorial leaders a joint approach to the global financial crisis.”

For sure, the punchline to Mr. Van Loan’s sly joke takes a bit of explanation. But once you understand the subtext, you surely can’t help but guffaw.

In an interview Wednesday morning, Finley shunned any suggestions of changing the way EI is managed, pointing instead to the ways Prime Minister Stephen Harper’s government has made the program more flexible to respond to provincial demands.

“Employment insurance has been federal jurisdiction since 1940,” Finley said by phone from Halifax where she unveiled an expansion of her national youth employment strategy. “It’s national programs to help all regions of the country. We’ve made it more flexible so that it does respond more directly to changes in local market conditions. But our focus is quite frankly on helping people get back to work, as evidenced by today’s announcement, so that they don’t need EI. I’m quite happy to work with Marois’s government on common goals.”

Her officials pointed out that Finley has not, however, said a flat No to anything from Quebec.

]]>http://www.macleans.ca/politics/ottawa/stephen-harper-and-quebec/feed/0One last stand against C-38http://www.macleans.ca/politics/ottawa/one-last-stand-against-c-38/
http://www.macleans.ca/politics/ottawa/one-last-stand-against-c-38/#commentsMon, 18 Jun 2012 17:22:14 +0000http://www2.macleans.ca/?p=268561The House is proceeding with debate at third reading for C-38 today, the New Democrats have thrown a reasoned amendment at the bill.That the motion be amended by deleting …

]]>The House is proceeding with debate at third reading for C-38 today, the New Democrats have thrown a reasoned amendment at the bill.

That the motion be amended by deleting all of the words after the word “That” and substituting the following: this House declines to give third reading to Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures, because this House:

a) does not know the full implications of the budget cuts given that the government has kept the details of the $5.2 billion in spending cuts from the Parliamentary Budget Officer whose lawyer Joseph Magnet says the government is violating the Federal Accountability Act law and should turn the information over to the Parliamentary Budget Officer;

b) is concerned with the impact of the changes in the Bill on Canadian society such as:i. making it more difficult for Canadians to access Employment Insurance when they need it and forcing them to accept jobs at 70% of what they previously earned or lose their EI;ii. raising the age of eligibility for Old Age Security and the Guaranteed Income Supplement from 65 to 67 years and thus driving thousands of Canadians into poverty while downloading spending to the provinces;iii. cutting back the federal health transfers to the provinces from 2017 on, which will result in a loss of $31 billion to the health care system; andiv. gutting the federal environmental assessment regime and weakening fish habitat protection which will adversely affect Canada’s environmental sustainability for generations to come; and

c) is opposed to the removal of critical oversight powers of the Auditor General over a dozen agencies and the systematic concentration of powers in the hands of Government ministers over agencies such as the National Energy Board which weakens Canadian’s confidence in the work of parliament, decreases transparency and erodes fundamental democratic institutions by systematically eroding institutional checks and balances to the government’s ideological driven agenda.

This apparently won’t do anything to delay a final vote on C-38—likely to occur tonight—but it does at least get the official opposition’s complaints on the record one last time.

]]>http://www.macleans.ca/politics/ottawa/one-last-stand-against-c-38/feed/3Splitting C-38: How bout now?http://www.macleans.ca/politics/ottawa/splitting-c-38-how-bout-now/
http://www.macleans.ca/politics/ottawa/splitting-c-38-how-bout-now/#commentsMon, 11 Jun 2012 14:33:28 +0000http://www2.macleans.ca/?p=265850Though the Conservatives rejected similar entreaties by the NDP last month, the Liberals hope the prospect of several hundred votes will now convince the government to spit the budget bill.…

]]>Though the Conservatives rejected similar entreaties by the NDP last month, the Liberals hope the prospect of several hundred votes will now convince the government to spit the budget bill. Specifically, the Liberals want the following removed from C-38.

Changes to EI that will damage seasonal industries and tear apart communities Changes to the qualifying age for Old Age Security, that will force millions of Canadians to take two extra ‘Harper years’ before they can retire Changes to fisheries regulations that will destroy fish habitat and wreak havoc on coastal communities Changes to environmental legislation that will wipe out 50 years of progress and hinder sustainable resource development

]]>http://www.macleans.ca/politics/ottawa/splitting-c-38-how-bout-now/feed/1Current EI reforms should be just the beginninghttp://www.macleans.ca/news/canada/current-ei-reforms-should-be-just-the-beginning/
http://www.macleans.ca/news/canada/current-ei-reforms-should-be-just-the-beginning/#commentsFri, 01 Jun 2012 16:29:01 +0000http://www2.macleans.ca/?p=262408The system Canada has right now is discriminatory, illogical and counterproductive

Assume for a moment you’ve been given the job of creating from scratch a federal program to help out-of-work Canadians find suitable employment as quickly and efficiently as possible. Would you begin with a system that provides greater benefits to workers who find themselves unemployed more often? Or provides incentives to stay in uncertain occupations forever? Would your ideal system offer identical Canadians vastly different benefits based solely on where they lived? And would you lard the program with inconsistent rules, such as offering benefits to self-employed fishermen, but not self-employed farmers?

Of course not. But this is exactly the sort of discriminatory, illogical and counterproductive system Canada has right now.

Last week Human Resources Minister Diane Finley unveiled a series of reforms to Canada’s much-criticized Employment Insurance program. While the changes don’t go nearly far enough to fix the entirety of EI’s problems, at least they mark renewed emphasis on the core task: getting people back to work.

The new rules require a wider and more aggressive job search. Currently, EI claimants receive, at most, three job listings every two weeks. Now a much more comprehensive list of relevant openings (including jobs in other parts of the country) will be delivered to all claimants. The longer a person remains unemployed, the more jobs must be considered.

Frequent users of EI will be required to accept work paying at least 80 per cent of their previous salary in the first six weeks of their job search. After seven weeks, the minimum falls to 70 per cent. Workers who rarely claim EI face somewhat similar requirements. All this reflects a proper adjustment of expectations. EI recipients can no longer refuse appropriate work. Ottawa points to worker shortages across the country, even in areas of high unemployment, as motivation for these changes. The growing use of temporary foreign workers proves many job openings are going unfilled. In New Brunswick for example, in January of this year, 2,444 unemployed fish plant workers applied for EI while 210 fish plant jobs were filled by foreign workers. That same month, Ontario had 648 nannies claim EI and 668 temporary foreign workers approved to do the same job. And in Alberta, 347 food counter attendants and kitchen helpers applied for EI at the same time restaurant owners received permission to fly in 1,261 foreign workers to do those exact jobs. A functional EI system would eliminate such disparities.

EI recipients will also be expected to take jobs that put their skills to use in different occupations. Asked what the rules might mean for a seasonally unemployed lobster fisherman, Finley replied: “If you’re used to lifting heavy loads, then maybe there’s a warehouse that needs some heavy loads lifted.” That seems entirely reasonable. The new rules include a variety of caveats regarding commuting distances and personal circumstances. No one will be required to move to take a new job.

Of course the mere suggestion that a lobster fisherman might be expected to do something other than haul lobster pots from the ocean a few weeks a year has been met with outrage and condemnation. But the driving force behind any proper unemployment scheme must be the recognition that working is preferable to sitting at home. There’s honour in work of any kind. Unfortunately, decades of political manipulation and regional lobbying have perverted EI into something quite different—it’s become a system that rewards seasonal unemployment and encourages a culture of grievance peddling. All this imposes a tremendous price on the Canadian economy as a whole. Premiums higher than they ought to be raise the cost of hiring new staff and push down employment rates everywhere. Workers and industries that rarely suffer unemployment are punished in the process.

It would make more sense to blow up EI and start over, perhaps under the previous and more-coherent title of Unemployment Insurance. A proper system would treat identical Canadians equally regardless of where they lived. It would be experience-rated, so that frequent users would pay higher premiums or receive lower benefits. And it would eliminate incentives for staying at home when there are suitable jobs to be filled—wherever those jobs happen to be located.

As a nation of immigrants, Canada was founded by intrepid folk prepared to pack up and move to a better job and a better life. Why should such a thing be considered beyond the pale today? Finley’s tentative EI reforms merely inform unemployed Canadians of job opportunities elsewhere in the country. A truly serious effort would take a much closer look at encouraging real job mobility. Unemployment is a national problem that requires a national solution.

]]>The Scene. The Prime Minister has a special gift for making his government’s policies sound altogether banal, utterly and profoundly unremarkable.

“We will continue to do our best to try and put some resources into helping people find jobs,” Mr. Harper said this afternoon, under questioning about his government’s proposed changes to employment insurance. “At the same time, for those who still cannot find work in their seasonal industries and seasonal parts of the economy where people have difficulty finding work, there will, of course, be employment insurance as a safety net for those people.”

But if Diane Finley’s smile did not assuage the opposition parties, what chance do Mr. Harper’s words? From the other side of the House, there is worry that seasonal workers will be particularly impacted. There is fretting that the unemployed will be compelled to take lower paying jobs. There is fear that those without work will be deprived of EI benefits. There are concerns that the Harper government didn’t consult with the premiers. There is even dismissal of the Conservative plan for more and better emails.“Mr. Speaker, there is not a single aspect of this plan that will actually help anyone find a job,” Thomas Mulcair fumed this afternoon. “What unemployed Canadians can look forward to are threatening emails from the Conservative government telling them what low-paying jobs they must now apply for, at least until they get kicked off EI and then they will not even be able to pay for their Internet connections any more. Can the Prime Minister explain why the Conservatives want to force unemployed workers to choose between a 30% pay cut or the EI benefits they have paid for and they deserve?”

Seated a couple spots over from Mr. Mulcair, David Christopherson thumped his desktop in appreciation for the NDP leader’s effort here—the government’s grand plan tied up in a harrowing tale.

When it was his turn, Bob Rae suggested that the changes would result in a downloading of costs to the provinces. Mr. Harper assured him it was all good.

“In terms of the specifics here, no one is suggesting any downloading, quite on the contrary,” the Prime Minister ventured. “We want to make sure the people who are getting EI or thinking of getting EI have the opportunity to work in the labour market. There are many cases where those labour market opportunities are not being taken advantage of and these reforms are part of a package to accomplish that. It is good for all parts of the country, including Newfoundland and Labrador.”

Unpersuaded, Mr. Rae reviewed the concerns of seasonal employers and proceeded to an almost philosophic query. “Could the Prime Minister tell us why he will not withdraw these suggestions until such time as he has established a stronger national consensus for the kind of changes that this requires?” the interim Liberal leader wondered aloud.

Regardless of whether the Prime Minister could or should or would, this question seemed doomed from the moment it escaped Mr. Rae’s mouth.

Standing for his sixth and final intervention, Mr. Harper moved then to land a final shot—a little something to be clipped for the afternoon chat shows or evening news.

“Our philosophy here is different than that on the other side,” he explained. “We want to make sure people can get jobs when jobs are available rather than employment insurance. We want to make sure that when jobs are available Canadians get first crack at those jobs, not temporary foreign workers.”

Ah ha. Here, apparently, the Prime Minister had figured out the opposition’s diabolical plans to put every citizen of this country on employment insurance while importing millions of foreign workers to perform all of the jobs that are presently filled by Canadians.

Faced with such a “dangerous economic experiment”—as the daily emails from the Conservative party warn Mr. Mulcair is preparing to unleash—the plan for more and better emails should seem all the more reasonable.

The Stats. Employment, 11 questions. Military procurement, five questions. Ethics and the RCMP, three questions each. Labour, fisheries, infrastructure, the budget and the environment, two questions each. Syria, the disabled, veterans, poverty, trade and disaster relief, one question each.

]]>The Scene. Ted Opitz, he who may or may not end up being the duly elected MP for Etobicoke Centre, had just finished doing his partisan duty, standing up to deliver the day’s harangue of the official opposition (“Ill-informed! Foolish! Dangerous!”) and Thomas Mulcair thought he spotted a segue.

“Mr. Speaker,” Mr. Mulcair offered in English before proceeding en francais, “let us talk about unemployment insurance, something that will become important for the member very soon.”

There were groans and grumbles from the government side, the Conservatives in attendance apparently finding this to be poor form. Profoundly saddened, John Baird stood and shed a single tear. “Mr. Speaker, what is most interesting is when this gentleman became Leader of the Official Opposition he said he would bring a new civility and raise the tone of debate,” the Foreign Affairs Minister sighed. “I guess not two months after his election, they have thrown that to the side.”With that, Mr. Baird turned to the script on his desk. “We are facing unprecedented labour and skills shortages in the country. It is tremendously important that the employment insurance program is working most effectively for Canada and for Canadians,” he explained. “That is why we are working to better connect Canadians with available jobs in their local area and to their appropriate qualifications and to ensure that they understand the responsibilities that they have while collecting EI.”

None of which did anything to either shame or soothe the leader of the opposition.

“Mr. Speaker, nobody should be surprised at the attitude of the Conservatives: it is their prime minister who said that the people of the Atlantic had a culture of defeat, that they are dependent on employment insurance,” he ventured. “And, for the Minister of Human Resources and Skills Development, employment insurance is attractive, it is even profitable. A lovely gift for the lazy who live by fishing, agriculture and forestry. How can they justify Conservative policies that target the unemployed, workers attacked unfairly and force people to lose a third of their salary or their employment insurance check?”

Mr. Baird again attempted reassurance. “Mr. Speaker, what we want for Canadians is what Canadians want for themselves,” he declared. “We want a Canada with a growing economy, with more jobs, with more hope and with more opportunity. That is exactly what we are doing with these changes to unemployment insurance.”

Here though—drawing a line from one morning headline to another—Mr. Mulcair had another segue. “Mr. Speaker, the unemployed are expected to abandon the careers they have trained for, commute up to two hours a day, take a permanent 30% pay cut, get a McJob or work in the mines, like their ministers have said, even when it is not related to their skills,” Mr. Mulcair reviewed. “However, failed Conservative candidates do not end up at MacDonalds or in the mines, do they?

The New Democrats chuckled.

“No, they get nice, cushy jobs in Paris, they end up on government boards racking up expense accounts,” Mr. Mulcair continued. “Meanwhile, hard-working Canadians are told that they are lazy and defeatist.”

When the NDP leader finished with his question, his caucus stood to cheer.

Mr. Baird was thus challenged to meet the moment, a rhetorical magician asked to escape a seemingly daunting trap. But how? How to both dismiss the charge and impugn the charger? How to turn the trapper, Mr. Mulcair in this case, into the trapped?

“Mr. Speaker, the individual he speaks of who was appointed ambassador in Paris I believe served in the Liberal cabinet, a cabinet that he served in at one point,” Mr. Baird, usually good at this, tried.

The Foreign Affairs Minister was apparently referring to Lawrence Cannon, the newly appointed ambassador to France who was defeated in the riding of Pontiac last Spring. Across the aisle, Mr. Mulcair shook his head. (Though they were both once cabinet ministers in Quebec, Messrs. Cannon and Mulcair served more than a decade apart.) Mr. Baird, perhaps seeing this, seemed to realize he was getting nowhere with this.

“Although,” Mr. Baird continued, “I think it was a bit before his time.”

Having thoroughly wasted 39 words, Mr. Baird returned to his reassurances.

Ms. May said that from 1975 to 1980, she received what was then called unemployment insurance during the off-season while working as a waitress and cook at her family’s restaurant and gift shop business in Cape Breton, she says. Labelling regular users of EI, such as herself, as lazy or abusing the system is unfair, she said.

“I paid into employment insurance. When I needed it, I used it. When I didn’t, I didn’t. I raise my personal experience because I don’t think anyone should be ashamed that seasonal businesses in this country that are big, or small, have benefitted from a legal system of insurance that pays for itself.”

]]>http://www.macleans.ca/politics/ottawa/trying-to-make-sense-of-the-ei-changes/feed/5Explaining the new EIhttp://www.macleans.ca/politics/ottawa/explaining-the-new-ei/
http://www.macleans.ca/politics/ottawa/explaining-the-new-ei/#commentsThu, 24 May 2012 19:06:59 +0000http://www2.macleans.ca/?p=261095The New Democrats and Liberals are displeased. Rona Ambrose attempts an easy-to-understand explanation.New EI changes are like ‘E-Harmony’ for job seekers and employers: matching Cdns looking for work with …

New EI changes are like ‘E-Harmony’ for job seekers and employers: matching Cdns looking for work with available jobs, data, support.

During this morning’s news conference, Diane Finley was asked specifically about the ramifications for seasonal workers.

Reporter: How does this impact on seasonal workers … if you take a fish plant worker, for example, works six months for the season. Then there’s a job at McDonald’s available. It’s deemed similar in terms of working around the kitchen. What do they do? They work six months at the fish plant, go to McDonald’s, say to the employer I’m here for six months and then I’m back? So how does this impact seasonal workers?

Diane Finley: Well, this is going to impact everyone because what we want to do is make sure that the McDonald’s of the world aren’t having to bring in temporary foreign workers to do jobs that Canadians who are on EI have the skills to do. It’s about taking advantage of the labour and skills that we have in this country, putting them to productive use and doing it in such a way that the employers are better off but the employee and his or her family is always better off. And that’s why we’ve made other changes leading up to this announcement to make sure that the worker is always better off taking work that’s available than not. And also it means that that money is here in Canada and not going to outside workers unless absolutely necessary.

]]>Diane Finley entered the room smiling. The Human Resources Minister is seemingly a firm believer that—as the lyric goes—when you smile, the whole world smiles with you. Or at least that the whole world is less likely to hear what you’re saying as threatening. Furrowing of the brow is to be avoided. Bright eyes are the order of the day.

“Today, I’m pleased to announce improvements to employment insurance to make it work better for Canadians,” she said with a smile.

Canadians, it would seem, are apparently at a loss. Some are unaware of where to find work. Others do not realize that their skills match job openings in other industries. But soon, through the wonders of modern communication, the unemployed will be more deeply and frequently enlightened.

“Currently, Canadians receiving EI benefits are only sent three job alerts every two weeks. These alerts come from the job bank, which only has about 20% of the jobs that are available. And we believe that this must change. As I said, we must help Canadians who want to work get back to work,” Ms. Finley explained. “As part of our announcement, we will be sending job alerts twice a day to Canadians receiving EI. And the job alerts will come from many sources, including the job bank, but also from private sector sources.”

Some significant portion of the $21 million set aside for improving the EI system will be spent on these emails. Though presumably these new expenditures will be easily covered by the billions saved from consolidating the government’s computer systems. Perhaps the consolidated computer systems will even make sending these emails that much easier.

There is also some business about defining “suitable employment” and what constitutes a “reasonable job search.”

Ms. Finley was eager to explain what this much was not about. “Folks, let me be crystal clear about something. These changes are not about forcing people to accept work outside their own area nor about taking jobs for which they are not suited,” the minister explained. “If someone on EI has a health problem that prevents them from taking an available job, then that job will not be deemed to be suitable employment. That is, they will not be required to accept that job. As another example, if there is work available but someone on EI is not physically capable of performing the work, then that would not be deemed to be suitable employment.”

So what is this about?

“We want to help a roofer who goes on EI each winter apply his skills with a residential construction company until he can return to his preferred occupation once the local roofing season begins again,” Ms. Finley enthused.

If that is it, it is perhaps a wonder why it took Ms. Finley so long to explain what it is her government is planning to do. And why this hasn’t all been detailed in legislation.

“These improvements will introduce new, needed, common sense efforts to help Canadians get back to work faster,” Ms. Finley ventured. “That’s good for the economy, that’s good for employers and that’s good for Canadians and for their families.”

At the very end of the question and answer session that followed, Ms. Finley was asked if the government would be consulting with Parliament on its proposed changes.

“There is a consultation process that is required through regulation and we’ll be following that process,” Ms. Finley responded.

This was not much of an answer to the question asked, but Ms. Finley delivered it with a smile.

]]>http://www.macleans.ca/politics/ottawa/the-commons-smiling-diane/feed/7Ottawa re-defines ‘suitable work’ in new EI rules announced todayhttp://www.macleans.ca/general/ottawa-re-defines-suitable-work-in-new-ei-rules-announced-today/
http://www.macleans.ca/general/ottawa-re-defines-suitable-work-in-new-ei-rules-announced-today/#commentsThu, 24 May 2012 16:32:38 +0000http://www2.macleans.ca/?p=260799Canada’s federal government announced new rules for those seeking Employment Insurance today.
Among other things, Human Resources Minister Diane Finley explained how the term “suitable employment” has been re-defined.
From…

The Conservative government unveiled a sweeping overhaul of Canada’s Employment Insurance system, creating three new tiers of job hunters that will most directly affect repeat users of the program.

(…) Canadians will be expected to broaden their search the longer they remain on EI.

The unemployed will be divided into three categories, depending on how frequently they file EI claims. They will be: Long-tenured workers, Occasional, and Frequent. The new changes will mostly push those in the latter category to broaden their job search quickly after becoming unemployed, which could mean accepting lower paid positions and jobs located as far as one hour away, or longer “in communities where longer commuting times are the norm.”

Last week, Finance Minister Jim Flaherty had begun preparing the ground for today’s EI announcement as he declared that, “There is no bad job, the only bad job is not having a job,” and added a personal touch to it: “I drove a taxi, I refereed hockey. You do what you have to do to make a living.”

]]>http://www.macleans.ca/general/ottawa-re-defines-suitable-work-in-new-ei-rules-announced-today/feed/10The new EIhttp://www.macleans.ca/politics/ottawa/the-new-ei/
http://www.macleans.ca/politics/ottawa/the-new-ei/#commentsThu, 24 May 2012 15:15:56 +0000http://www2.macleans.ca/?p=260895Diane Finley has just now explained how the government plans to reform employment insurance. The official news release and backgrounder is here.
Early reviews are in from the Globe.The …

The Conservative government unveiled a sweeping overhaul of Canada’s Employment Insurance system, creating three new tiers of job hunters that will most directly affect repeat users of the program. The new rules will mean less generous terms for frequent users of EI, while giving Canadians who rarely use the program more leeway to look for jobs in their field.

Unemployed Canadians will face tougher requirements to hang on to their Employment Insurance benefits under a new crackdown by the Conservative government. The intent of the changes is to push unemployed Canadians off the insurance rolls and into the workforce, even if it means they must accept lower-paying jobs or work they might not want.

The longer and more frequently someone is claiming employment insurance, the broader their job search will have to be and the lower the wages they must be willing to accept, according to proposed regulations outlined this morning.

]]>http://www.macleans.ca/politics/ottawa/the-new-ei/feed/2An explanation for EI?http://www.macleans.ca/politics/ottawa/an-explanation-for-ei/
http://www.macleans.ca/politics/ottawa/an-explanation-for-ei/#commentsThu, 24 May 2012 12:00:58 +0000http://www2.macleans.ca/?p=260776Human Resources Minister Diane Finley has scheduled an announcement for 10:30 this morning at which she might explain what the government plans to do with employment insurance. In the meantime,…

]]>Human Resources Minister Diane Finley has scheduled an announcement for 10:30 this morning at which she might explain what the government plans to do with employment insurance. In the meantime, Jason Kenney invokes the one-hour rule.

“I think the idea is, that within your own local community, within say an hour’s drive or so, if there are unemployed workers receiving EI and they’re not applying for jobs that are available at their skill level then there’s a mismatch,” he said, “And we want to solve that problem.”

]]>http://www.macleans.ca/politics/ottawa/an-explanation-for-ei/feed/0Today’s generalitieshttp://www.macleans.ca/politics/ottawa/todays-generalities/
http://www.macleans.ca/politics/ottawa/todays-generalities/#commentsWed, 23 May 2012 18:03:47 +0000http://www2.macleans.ca/?p=260596Bernard Valcourt becomes the latest cabinet minister to try to explain what will come of the unexplained employment insurance reforms in the budget bill.“I guess it is particular to …

]]>Bernard Valcourt becomes the latest cabinet minister to try to explain what will come of the unexplained employment insurance reforms in the budget bill.

“I guess it is particular to each region. I mean, you know, I don’t think that it would be proper or it would be reasonable to expect someone from Fredericton or Saint John to commute to Moncton for a job daily,” Valcourt said. “You know it doesn’t make sense. So we’re talking communities and surrounding communities. What is reasonable? The details are not out yet.”

It’s about a two-hour drive from Fredericton or Saint John to Moncton.

Valcourt said he knows many people in the northwestern city of Edmundston, who commute about 30 minutes to St. Leonard for work. But he said he wouldn’t expect people to travel to Woodstock, which is about two hours south of Edmundston.

“It’s the custom and if the economic fact of life of the region is for people to work in their community and the surrounding communities. I don’t think it would be proper to force people to travel to other areas in the province to get a job,” he said. “There are hundreds of small- and medium-sized business be it in Fredericton or Moncton or Saint John as we speak that are looking for employees. i think what is aimed and the objective here is to connect those people that want to work with available jobs in their communities and the surrounding communities.”

]]>http://www.macleans.ca/politics/ottawa/todays-generalities/feed/7Explaining EIhttp://www.macleans.ca/politics/ottawa/explaining-ei/
http://www.macleans.ca/politics/ottawa/explaining-ei/#commentsTue, 22 May 2012 18:12:04 +0000http://www2.macleans.ca/?p=260269Fisheries Minister Keith Ashfield attempts to explain what the Harper government’s unspecified EI reforms will mean.Ashfield said people will no longer be able to turn down job opportunities within …

Ashfield said people will no longer be able to turn down job opportunities within an hour’s drive if they expect to collect benefits. “It’s not to force people to go to Alberta, it’s not to force people to, you know, drive for four hours, or move away from their home community. That’s not the intent at all,” Ashfield said.

Alas, Mr. Ashfield may have again been speaking without first checking with his assistant.

Setting a clear geographical rule of a one hour’s drive would bring clarity to one of the most debated and subjective section of the current EI rules. However Conservative officials told the Globe and Mail that the minister was only speaking in general terms to make the point that Canadians on EI will not be expected to move.

On March 16, 1994, the Liberal government of the day tabled Bill C-17, an act to amend certain statutes to implement certain provisions of the budget. Nine days later, a new Reform party MP, elected just five months before, rose on a point of order to complain. The bill, he said, was “of an omnibus nature,” containing measures that dealt with disparate issues: public sector compensation, transportation subsidies, the CBC, employment insurance and payroll taxes. “In the interest of democracy I ask: how can members represent their constituents on these various areas when they are forced to vote in a block on such legislation and on such concerns?” the young Stephen Harper wondered aloud. “We can agree with some of the measures but oppose others. How do we express our views and the views of our constituents when the matters are so diverse?”

Though the rookie MP’s words were not enough to derail that year’s budget bill, his words live on, cited more than 18 years later to taunt a Prime Minister whose government is now accused of abusing Parliament with a budget implementation act that dwarfs the bill that so troubled the rookie MP. But Bill C-38 doesn’t merely invite inconvenient comparisons. It sets the stage for a great—and potentially defining—battle between the new majority government and the newly realigned official Opposition.

“On this one issue I actually agree with Stephen Harper,” NDP House leader Nathan Cullen told reporters at a news conference this month. “It is inappropriate to put so many sweeping changes to so many different areas in the budget bill. The Conservatives are trying to hide from the oversight and the accountability that Canadians deserve.” The budget implementation act currently before the House of Commons—quite literally, at least in theory, the legislation necessary to implement the government’s budget—measures more than 400 pages and proposes to amend dozens of acts of Parliament. Among other things, it deals with environmental regulations, resource development, employment insurance, Old Age Security and immigration policy.

Only three times between 1994 and 2005, when the Liberals were in power, did a budget implementation act exceed 100 pages at the time of royal assent. On seven occasions, the bill that passed Parliament was less than 70 pages. But since the Conservatives were elected, Parliament has faced several novel-length bills: nearly 400 pages in 2007, more than 500 pages in 2009 and more than 600 pages in 2011. In 2010, they tabled and passed a bill of approximately 900 pages.

Shortly after its tabling, the New Democrats proposed that C-38 be split into several separate bills, but a day of negotiation between the government and the official Opposition failed to produce a deal. In lieu of compromise, there is now conflict. The opposition parties cannot prevent the bill from passing Parliament, but they can make its passage somewhat complicated. A mini-filibuster managed to manipulate the parliamentary schedule enough to add a few hours to the budget debate. The Liberals have suggested that the bill, containing more than 700 clauses, could be fought clause by clause when it returns to the House for third reading. Green MP Elizabeth May says she may have “potentially hundreds of amendments” to propose.

Perhaps hoping to replicate the sort of backlash that compelled the Conservatives to back away from their so-called “lawful access” legislation earlier this year, the New Democrats will also be moving the fight beyond the procedural. On Parliament Hill and across the country they will be convening hearings and town halls to investigate and discuss C-38’s ramifications. Social media will be used in hopes of rallying public attention and opposition.

The Conservatives’ pitch now, as it was during their last re-election campaign, is premised on the economy. In an interview with Maclean’s this month, Government House leader Peter Van Loan invoked the troubles of Europe and the United States and the need to “make a choice about the future” to explain the extent of C-38. “If Canada’s to set itself apart with a path where we can ensure prosperity so we can pay for health care at the levels we want to in the future, so we can deal with the changing demographics of a population that’s aging and still be able to support them, we need to be able to [harness opportunities], both on the workforce side and on the resource development side,” he explained. Cullen counters that if the government believed in each of its initiatives, it would have the courage to table them as individual pieces of legislation.

Even before the budget bill was tabled on April 26, promised cuts were generating criticism. Faced with potential layoffs, public sector unions warn of potential disaster: cuts at the Canadian Food Inspection Agency would put consumers at greater risk, reductions within the Canada Border Services Agency would lead to more child pornography, weapons, illegal drugs, terrorists and sexual predators entering the country. Four days after C-38 was presented, the Liberals tabled a motion in the House that declared that the Harper government and specifically three ministers who served in Mike Harris’s Ontario government—Jim Flaherty, John Baird and Tony Clement—had “failed to learn the painful lessons from Walkerton, which proved that cuts to essential government services protecting the health and safety of Canadians are reckless and can cause Canadians to lose their lives.”

The Conservatives have assured that none of the promised budget cuts will reduce the safety or security of Canadians, but they are being pressed to explain exactly how they will achieve the promised savings. In April, the parliamentary budget officer wrote to 83 departments seeking details, but three weeks later he reported that only eight had responded.

C-38 is thus challenged on a number of fronts: in terms of procedure, transparency and policy. And the rhetoric is stark, the budget bill said to have profound consequences for the economy, the environment, public services and democracy. “The best thing for government is a budget that goes through unnoticed and unreported. And the worst thing is when a budget lingers,” says Brad Lavigne, a former adviser to Jack Layton, the late NDP leader. “Every day the NDP can keep the budget and what they’re trying to ram through, the policy changes in the budget bill, every day that they can keep that in the news, in front of Canadians, is a good day for the Opposition and a bad day for the government.” The public’s interest in parliamentary principles is demonstrably limited—after the Conservatives were found in contempt of Parliament last year, the electorate punished them with a majority—but issues like environmental regulation and employment insurance might play to the NDP’s goals of courting the 60 per cent of Canadians who aren’t inclined to vote for the Conservatives.

“If Thomas Mulcair and the team are fighting for those issues, then those people will look to the NDP to be the non-Conservative alternative,” Lavigne says.

The budget bill is offically called the “Jobs, Growth and Long-term Prosperity Act” and on those terms the Conservatives are likely willing to continue debating. The most controversial aspects of the bill, those related to environmental assessment and resource development, might provide an opening for the NDP, but it might also set up an economic debate of the sort the Conservatives are willing to have. “I think the key debate is actually one that’s going to continue from now until the election, which is, what are we going to do about our energy resources here in Canada?” says Jason Lietaer, a Conservative strategist. “Are we going to use them and try to use them to be prosperous? Or are we going to take a different approach?”

In other words, whatever the particulars of how the budget bill was written, the next few weeks of public and parliamentary discussion might only mark the start of a three-year debate.

The Scene. Peggy Nash was very nearly pleading. “Will someone in the government,” she asked, “please outline right now what constitutes suitable employment?”

In Ms. Nash’s moment of need it was Ted Menzies, minister of state for finance, who stood. “Mr. Speaker, I actually have some examples here of what constitutes suitable employment,” he reported.

At last, clarity seemed at hand. “A mining company in Newfoundland is looking to hire 1,500 people in St. John’s, Newfoundland, through the temporary foreign worker program,” Mr. Menzies explained. “There are 32,500 people looking for work right now. That is why we are trying to make EI more effective to help these mining companies get people to employ.”

What precisely was the minister of state suggesting here? That if you are presently looking for work you might soon be expected to strap on a helmet lamp and make for St. John’s? And are there really only 32,500 people in this country presently looking for work?

There were chuckles of incredulity from the opposition side.

Another opposition question afforded Mr. Menzies an opportunity to further explain himself.

“I do want to clarify that 32,500 looking for work were actually in Newfoundland,” he said, “as was the mining company that was looking for the 1,500 people.”

“Ahh!” mocked voices from the other side. Thomas Mulcair shook his head in demonstrable exasperation.

Mr. Menzies tried another example. “Nova Scotia’s recent shipbuilding contract will create over 15,000 jobs over the next 30 years and the provincial government is already talking about importing workers,” he posited. “At this point there are 45,000 Nova Scotians looking for work.”

So the unemployed in Nova Scotia will soon be asked to build ships?

Another question then and another chance for Mr. Menzies to explain.

“Mr. Speaker, as I have been saying, there are available jobs out there, but we will ensure that Canadians will not be expected to take jobs that are not within their skill-set,” he offered.

So only those out-of-work Nova Scotians with skills particular to the building of ships will be asked to take work?

“One other thing we need to exemplify,” he continued, oddly, “is that no job seeker will be asked to relocate.”

Ah. So only out-of-work Haligonians with skills particular to the building of ships will be asked to take work.

This perhaps begs more questions. Like, how many out-of-work Haligonians with skills particular to the building of ships would otherwise turn down one of those 15,000 jobs? And if relocation is not to be demanded and one’s skill set is relevant , how precisely are those “45,000 Nova Scotians looking for work” applicable to those 15,000 jobs?

“The important thing here is, there is a lot of people who want to go to work, there are people who are on EI,” Mr. Menzies clarified. “We need to make sure its effective and the jobs that are still vacant can be filled.”

Despite all of this explanation, the official opposition remained unsatisfied. “When will she stand up,” Chris Charlton asked of the absent Human Resources Minsiter, “and give Canadians a straight answer about her plans for EI?”

In response to Ms. Charlton, Mr. Menzies returned to something he had earlier claimed that the leader of the opposition said.

“I would like to quote the leader of the NDP once more, that we, on this side of the House do not think it is, as he says ‘a colossal waste’ when Canadians are actually working,” Mr. Menzies admonished. “Canadians working in restaurants, as truck drivers, as food handlers, we think they are important contributors to the Canadian economy. We support and applaud those Canadians.”

It is unclear whether Mr. Mulcair has actually used this phrase in this regard*, but Ms. Nash has.

“It is a colossal waste of skills,” she said the other day, “if we have people who are trained as computer engineers or teachers or nurses or electricians who are working in retail, Tim Hortons or picking fruit in the agricultural sector because it means they may not be available when a job in their field comes open.”

From Mr. Menzies’ attempted explanations, it is unclear in what way he disagrees with Ms. Nash.

The Stats. Employment, 10 questions. Telecommunications, five questions. Old Age Security, the environment and aboriginal affairs, four questions each. Government spending, trade, satellites and the territories, two questions each. Immigration, resource development, Senate reform and food safety, one question each.